Sober Up

by namawinelake


The redoubtable Mr Justice Peter Kelly is out of sorts. Not only is he a little upset that he is required
 to rule on matters

 in the Quinn saga , based on an Act, the IBRC 

Act 2013 rammed through the Oireachtas last week, without actually seeing a copy of the Act, because
 the bunch of 

drunks – literally in some cases based on the demeanor and outbursts of some and the fact the
Dail bar was open 

until the wee hours – who voted to enact the emergency legislation early last Thursday morning
to liquidate IBRC, has 

not bothered to make the Act available on the Government website. Judge Kelly has been operating
 on the basis that the Bill that he has sight of, was not amended before being signed into law – “not
satisfactory” is the euphemism deployed by the Judge with having to rely on a Bill, but we know what
he really means.

This morning, the Government may be equally concerned at the approach taken by Judge Kelly in a
 NAMA case yesterday. 

NAMA is pursuing a developer Kevin McNulty over €88m loan facilities provided in 2009, and Kevin and
 his legal team are

 manouevring to claim that, because Anglo was insolvent in 2009, the loans were consequently
 negligently advanced

 and that this fact would mitigate, if not indeed wipe out completely, any liability.

Whilst acknowledging that reckless lending has not been established in Irish law as a defence
 to liability, the Judge 

noted, according to Ann O’Loughlin in the Irish Examiner today “this case involved claims that loans
 were advanced 

negligently. He considered Anglo’s solvency relevant”

The upshot of the preliminary hearing yesterday at the High Court was that “an Anglo official” has to
produce an

 affidavit in advance of the full hearing in June 2013, to confirm “yes or no” if Anglo was insolvent in
2009, and given

 the need to inject €25bn of promissory notes into Anglo in 2010, it is a safe bet that Anglo was
 indeed insolvent in 2009. 

And that being the case, the spectre has now been raised of the Judge dismissing NAMA’s application
 to recover €88m 

of loans, and Kevin McNulty walking away scot free.

If the Judge allows this defence to be pursued then AIB – which received a €20bn bailout – EBS – which
 received 

a €1bn bailout – INBS – which received a €5.4bn bailout – PTSB – which received a €4bn effective
bailout and even 

Bank of Ireland – which received a €4.7bn gross bailout, might all find that they cannot enforce loans
 which were

 provided between 2008-2010.

Which may lead to further billions of loan losses in the banks – there will have been some new
 facilities in 2009, but 

other facilities will have been reconfirmed and received additional advances.

NAMA yesterday disputed that any of this was relevant and we know that there are draconian terms
in the NAMA Act 

which absolve NAMA of responsibility for the actions of the lenders whose loans NAMA has
acquired. But we are

 awaiting a ruling or view from the Attorney General, MAire Whelan, from a referral by Judge
Charleton last October

 2012 as to whether these terms in the NAMA Act are constitutional.

Time to sober up.

namawinelake | February 12, 2013 at 8:56 am | Categories: Banks , Developers , Irish economy , 

NAMA , Politics | URL: http://wp.me/pNlCf-3CT

    Comment     See all comments  

Unsubscribe or change your email settings at Manage Subscriptions .

Trouble clicking? Copy and paste this URL into your browser:
http://namawinelake.wordpress.com/2013/02/12/loans-made-by-anglo-in-2009-may-not-be-enforceable-if-the-bank-was-insolvent/         Thanks for flying with WordPress.com